Stanford Issues Novel Sustainability Bonds

The university says it’s the first higher-ed institution to issue bonds to reduce its adverse impact on the climate, which it plans to use to start a school focused on the environment.

Stanford University sold $375 million in environmental, social, and governance (ESG)-related public market debt securities in April to help finance various projects in the university’s capital plan. The university says the sale marked the first time a US college or university has issued bonds carrying dual climate and sustainability designations for financing campus construction and renovation projects.

The university said the securities are in the emerging ESG investment category and have been externally verified by the International Capital Markets Association’s sustainability bond designation and the Climate Bond verification, both of which are based on the United Nations’ Sustainable Development Goals (SDGs).

“This combination of bond designations represents a first, not only for Stanford but for US higher education,” Stanford President Marc Tessier-Lavigne said in a statement. “We recognize that we must operate by the same rigorous standards that we apply to research and scholarship, as we work to advance solutions to the urgent needs of our planet and society.”

Oregon-based financial consultant Kestrel Verifiers conducted an independent review that determined whether Stanford’s programs met the standards required for the bond designations.

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“The projects that Stanford will finance with the bonds clearly support the advancement of health equity, improve access to housing in an undersupplied market, and sustain the entire university’s diversity and equity goals,” Kestrel CEO Monica Reid said. Reid added that the projects will help Stanford reduce greenhouse gas emissions “at a rate that exceeds internationally recognized climate action goals.”

Stanford said the new projects include a new school that will focus on climate, sustainability, and Sustainable Stanford, the university’s effort to reduce its environmental impact. The school will leverage Stanford’s climate and sustainability research, will include faculty in core departments, and will run degree-granting programs for undergraduate and graduate students.

The school is also intended to include a so-called “sustainability neighborhood” that would provide place-based education and infuse sustainability in the education of its students. Additionally, it will include an accelerator to drive new sustainability solutions through external partnerships with government, industry, and nongovernmental organizations.

Stanford’s long-term sustainability goals include committing to use 100% renewable energy sources and to have greenhouse gas emissions levels at 80% below peak by 2025, as well as producing zero waste by 2030. It said it will reach its 80% greenhouse gas reduction goal three years ahead of time when a new solar facility comes online in 2022.